in the last blog i made an attempt to understand marxism by incorporating a greater degree of objectivity in my appoach....i concluded that i am anything but a marxist...this is something i know now...something i did not know back in college....
ideologies facinated me..they do now too...the difference lies in my perspective...
liberalism was one strand of thought with captured the imagination of many , including me ( if i may say so at the cost of contradicting myself)...
the economics taught in delhi univeristy with a neoclassical framework, emphasized the benefits and the 'goodness'of leissez faire... the merits of competition.... the condition for efficiency seemed to be equated with profit maximization..MR=MC...
these things appeared very mechanical to me...for the humanistic touch was so absent in the study of this'dismal science'...
papers like macroeconomics , national income accounts, discussed development and growth in the context of a rising GDP...that is if the government expenditure rises on things as arbit as financing the junket of a minister , the GDP figure will register an increase...
i was relieved to finally find that the stream of welfare economics, did have some answers to my questions....
the welfare of society could be incorporated in the general equilibrium framework, with the purpose of attaining efficiency...the only problem was the choice of social welfare function...Arrow's imposibility theorm , negates the possibility of a well behaved social welfare function ... so it is the interpersonal decision making , which can be used in arriving at such functions...a society which values the well being of the poorest will have a different welfare function than a dictatorial regime... or a society could assign weights to well being different income groups to arrive at a social welfare function...
the approach may seem elegant...but the question arises--who decides the weights??????
the question may seem simple...but the answer to it holds the key to failure of economic theory in answering questions of greater relevance to mankind... from an academic perspective one may make assumptions about the nature of decision takers....but we really need not be Einstein
to figure out, the distortions that creep in with relaxation of these assumptions...
so i was disappointed in college for failure on my part to get answers to questions pertaining to the synergy between competition and welfare....
contd..
13 comments:
that was quiet a bit.mixed with a lot of economics jargons i had to spend some 2 hours studying some of those terms.and still m not in a proper position to form an objective.all i can say is thattaking welfare economics as a macroeconomic prespective mayb alright but i still think its just another way of putting that social and we care tag on your economic framework.i still believe in the market forces.trust me they are eventually the deciding factors.and putting weightages never gives results as it is a microeconoomic concept.and deciding something using arbit statistics and or methods like game theory never works.the varience factor overshoots always.i say this coz or fails evertime i plan a working plan for a factory layout just taking stats.and as far as going by experience goes,its the final verdict."market rules." care about yourself.and care about wealth creation.the so called lower section will get lifted up automatically without amartya sen and john nash.and no economic concept,may it be marxism or liblarism works.the truth is only capitalism and materialism rules.
i understand fully what you are trying to say..in fact i was going to follow up this blog with a discussion on the notion of free market..the free market argument will work given 'perfectly competitive economy'... that is precisely the loophole of any such argument..lemme take it up in next blog
"somewhere i belong..... "
Is amazing!!!
:)
=KM=
any idea what happened to all the good commies...they all seem to have vanished.
commies are commies...good or bad is how u see them...for me there is no distinction.
What you have said about economic welfare is apt. Neither Capitalism nor socialism is a complete system by itself. It all depends upon the circumstances really though thw world over so far capitalism has prevailed. Nice write-up
Our undergraduate teachers had us fooled didn't they?? Perfect Competition, Mathematical Derivations and Concave/Convex curves defined economics for us in the first 3 years of what was our first brush with independent thinking... I don’t know about you, but I was too busy learning up stuff in school to develop an independent mind.. Economics was always defined as the "science" of allocating scarce resources... It still is!! (Do a define: economics in google if you don’t believe me) You would think that after economics and economists’ deciding on the way a country is run; the definition would be expanded to bring in ideologies (great piece on the same by the way) given the way it affects economic policy... There's no longer a right or a wrong and therein lies the problem... Vir Sanghvi wrote a piece on somewhat similar lines on the 5th of February… Even though it was related more to the recent spate of demolitions in Delhi, it did bring out one fact i.e. there can never be two different and correct ways to look at the poor… I completely agree with your statement that the failure of economic theory to answer socially relevant questions efficiently (another very controversial concept) is a direct outcome of the fact that even though we know that a social welfare function exists we cant decide on the weights to assign to different classes in the economy… However I would most probably go a step ahead and say that this failure is more a result of the surprising lack of consensus to do the right thing by both policy makers and the population in general… I know it sounds like a Marxist opinion but believe me nothing could be further from the truth… I’d most probably classify myself as a far out left liberal…
Our undergraduate teachers had us fooled didn't they?? Perfect Competition, Mathematical Derivations and Concave/Convex curves defined economics for us in the first 3 years of what was our first brush with independent thinking... I don’t know about you, but I was too busy learning up stuff in school to develop an independent mind.. Economics was always defined as the "science" of allocating scarce resources... It still is!! (Do a define: economics in google if you don’t believe me) You would think that after economics and economists’ deciding on the way a country is run; the definition would be expanded to bring in ideologies (great piece on the same by the way) given the way it affects economic policy... There's no longer a right or a wrong and therein lies the problem... Vir Sanghvi wrote a piece on somewhat similar lines on the 5th of February… Even though it was related more to the recent spate of demolitions in Delhi, it did bring out one fact i.e. there can never be two different and correct ways to look at the poor… I completely agree with your statement that the failure of economic theory to answer socially relevant questions efficiently (another very controversial concept) is a direct outcome of the fact that even though we know that a social welfare function exists we cant decide on the weights to assign to different classes in the economy… However I would most probably go a step ahead and say that this failure is more a result of the surprising lack of consensus to do the right thing by both policy makers and the population in general… I know it sounds like a Marxist opinion but believe me nothing could be further from the truth… I’d most probably classify myself as a far out left liberal…
@abhishek
consensus is a dangerous term to use in my opinion..and therein lies the problem..how do we define consesus...going by what the majority think is right in which case eqity might be an issue.. or a supreme authority or lets say government elected by the people enjoying majority vote deciding on behalf of the populace..consensus is a rather vague concept according to me..
@abhishek
but u r very right in saying that the problem arises in most cases by the mismatch between concerns of the populace and the policymakers..
been few months since i read smthin new on this blog of urs..!
kindly enlighten our souls with smthin new !
Intresting,
communisim, capitalism xyzsim none would help until each individual understands and accepts his/her own "ism" which is is difficult to do.
The search is tough, comming to terms with the result even tougher. The most difficult part is acceptance of the fact that other people would have a differnet "ism" to what u find comfortable.
one can spend time analysing any "ism" from, ones point of view.
the point of view is formed over time, your schooling, home environment ... there are 1000 things that can make a difference to your point of view.
what is intresting is the conflict between ones own thoughts, and the process of coming to terms with it.
Post a Comment